Last week was full of surprises! The US dollar plunged despite a better-than-expected retail sales report…
USD surged after Fed’s hawkish surprise
- The Fed made a hawkish surprise! The bank would start a discussion about scaling back bond purchases. Besides, it is likely to make two interest-rate increases by the end of 2023 (sooner than expected)! Finally, the central bank raised estimates for inflation for the next three years and upgraded the GDP growth to 7% for this year from the prior 6.5%. As a result, the US dollar surged to levels unseen since early May, while stocks, stock indices, crude oil, and gold sharply dropped.
- Australian labor data came out better than expected. The number of employed Australians rose to 115,000, while only 30,000 were forecasted. The jobless rate was 5.1%, better than the anticipated 5.5%. AUD/USD is likely to rise today due to the positive labor data.
- Turkey’s central bank is expected to keep interest rates unchanged. The Turkish lira is traded at the local lows. USD/TRY has just crossed 8.60, and it’s edging higher to 8.70.
EUR/USD dropped enormously! The pair has just broken below the psychological mark of 1.2000 and the 200-day moving average. Now it is getting closer to the lower trend line at 1.1950, which the pair may struggle to break. The RSI indicator is below 30,00 on the 4-hour chart, signaling the pair is oversold. Thus, we might expect the reverse up soon. The move above 1.2000 will drive EUR/USD back to 1.2050.
It’s quite an interesting situation on the gold chart! XAU/USD has broken the 61.8% Fibonacci retracement level and pulled back to it. The long upper shadow tells us that the price is going to reverse down. The move below the 50.0% Fibo level of $1800 will push the metal to the next level at $1770.
S&P 500 has reversed down and touched the lower trend line at 4175. It’s a perfect opportunity to buy such a credible stock index at a lower price! The move above Tuesday’s high of 4260 will drive the stock index to the psychological mark of 4300. Support levels are at the 50-day moving average of 4175 and the mid-May lows of 4115.
Last week was very interesting for the markets, as we saw the releases of the US Inflation and Disney’s earnings report. So let's see what we should await this week!
The volatility that the markets experienced last week promises the second tidal wave! What should your favorite assets anticipate during the first week of February?
The Australian Bureau of Statistics will announce the updated Unemployment Rate and Employment Change data on Thursday, May 19, at 04:30 MT.
The UK Office for National Statistics will publish Consumer Price Index (CPI) data on Wednesday, May 18, at 09:00 MT.
The US Census Bureau will announce Core Retail Sales and Retail Sales on Tuesday, May 17 at 15:30 MT.